Bank Deposits, Reconciliations, and Corrections

Scope

This official policy provides authoritative guidance to the University in accounting for the bank deposits, reconciliations and corrections.

Reason for Policy

To ensure all money received by the University is properly recorded and reconciled to mitigate the risk of loss.

Policy Statement

Departments or locations that makes deposits to their respective bank accounts, should properly record the receipt of all money by making an immediate record of receipt.  The receipt should correspond with the bank deposit slip and to the source documentation (such as cash register or mail receipt log).  Each day each campus cashier’s office will aggregate the deposits into one bank deposit per campus.  Departments may also create a CRR or ARR to correspond to anticipated ACH or wire payments received by the University.  Proper segregation of duties should be followed with separate individuals performing the handling of the money, recording the deposit and making the deposit.

The campus cashier’s office is responsible for reconciling the bank deposit slip with the funds to be deposited.  A discrepancy between a bank deposit slip and the funds for deposit is reported by the bank to the location making the deposit. The discrepancy is corrected by a debit or credit memo prepared by the bank with a copy sent to the depositing location.  A discrepancy between the deposit entered into the general ledger and the funds for deposits must be immediately reported by the campus cashiers office to the unit making the deposit.  If resolution of the discrepancy would delay making a deposit at the bank, the difference is adjusted on the general ledger cash receipt document by indicating an "over" or "short" amount, and a written report is filed with the unit's supervisor.

The UM System Controller’s office is responsible for matching and approving the CRR and ARR’s related to ACH and wires received as well as reconciling the bank deposits to the general ledger on a daily and monthly basis. This matching function should be performed by someone with no access to cash or the payments function and serves as a segregation of duties between the recording functions and the responsibility for reconciling daily activity.  Items that do not match exactly are reviewed and reconciled manually. The UM System Controller’s Office reviews each bank account and reconciles non-matched items. This process is a control to ensure entries to the financial records of the University are accurate, and that entries for the receipt of cash are complete and timely.

All reconciliation differences are reported monthly to the responsible department or location for review.  The department or location is responsible for determining the corrective action needed and reporting it to the UM System Controller’s Office.

Definitions

Accountabilities

UM System Controller’s Office:

• Matching and approve the CRR and ARR’s related to ACH and wires
• Reconcile bank deposits to the general ledger

Campus Cashier’s Offices:

• Prepare centrally funds for deposit
• Reconcile bank deposit slip to the funds for deposit
• Reconcile funds for deposit to the general ledger

Departments or Deposit Location:

• Prepare funds for deposit and prepare receipt entry into the general ledger
• Determine corrective entries as needed

Additional Details

Forms

Related Information

Policy 21302 on Segregation of Duties
Policy 25201 on Cash Receipts
Policy 25702 on Transportation, Escorts and Guards

History

This policy combines the following former policies:

• Accounting Policy Manual 15.10 – Daily Reconcilement (revised 5/1/2007)
• Accounting Policy Manual 15.15 – Monthly Balancing (revised 6/12/2008)
• Cash Receipts Manual 306 – Corrections and Adjustments (created 6/29/1999)

Procedure